The nation’s largest retailer is joining the solar boom in Illinois next year.
Walmart has reached an agreement with a California company to install solar systems at two distribution centers and 19 stores, including those in Belleville, O’Fallon, Sparta and Litchfield. It’s billed as a way to save money on electricity and help the environment by reducing carbon emissions.
The move was prompted by the state’s new Adjustable Block Program, which provides incentives for commercial and residential rooftop solar projects, as well as community solar farms.
“We can meet or beat our current cost of energy (under the agreement),” said Katherine Canoy, Walmart’s senior manager for renewable energy, speaking by phone from Bentonville, Arkansas. “From a business perspective, it makes sense for us on a lot of levels.”
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The company already has solar systems at about 350 of its 5,000 sites in the United States, including Walmart and Sam’s Club stores. Canoy said installations don’t have a direct effect on prices, but the company’s increasing use of renewable wind and solar energy will help keep them low in the long run.
For Walmart’s first 21 solar projects in Illinois, the retailer is partnering with SunPower, a company based in San Jose, California. It designs, installs and maintains commercial solar systems all over the country, often combining rooftop and ground-mounted solar panels.
Most customers are able to generate 40 to 75 percent of their electricity with solar, said Robert Rogan, SunPower’s senior director of strategy. Walmart generates 5 to 70 percent at its existing solar sites.
“It really varies from store to store, depending on how much of the roof space we can utilize and also how much energy that store is using,” Rogan said.
Some Walmart stores have skylights and air-conditioning units on their roofs, and climate can affect how much electricity is needed to heat and cool buildings.
State agency must approve projects
Walmart’s solar expansion in Illinois will proceed as Adjustable Block Program incentives become available, Canoy said.
Incentives will take the form of renewable energy credits that solar projects earn by producing electricity and that utilities, such as Ameren, are required to buy. The money comes from a state-mandated surcharge of up to 2 percent on all residential and commercial power bills.
“This creates a new market for solar in Illinois,” said Brad Klein, senior attorney for the Environmental Law & Policy Center, a nonprofit environmental-advocacy organization based in Chicago.
Projects fall into three categories: solar farms, small rooftop systems (less than 10-kilowatt capacity) and large rooftop systems (10 to 2,000 kilowatt). All must be approved by the Illinois Power Agency, an independent state agency that oversees energy procurement for regulated utilities and administers the Adjustable Block Program.
The IPA is now registering solar vendors, like SunPower, to participate in the program. It will begin accepting applications for specific projects in mid-January.
There is a limited amount of money available to pay for renewable energy credits, according to IPA Director Anthony Star. Competition among solar projects will depend on the number of applications submitted in the three categories.
“At this point, we don’t know if there’s going to be a lottery or not,” Star said.
He expects less competition for rooftop solar projects than for solar farms, which generate electricity that can be added to the state’s energy grid and sold to other customers.
Vendor to hire laborers and electricians
Walmart’s first 21 solar systems in Illinois would have a total capacity of 23 megawatts (23,000 kilowatts), compared to the 5-kilowatt capacity of many home systems.
SunPower would install, maintain and own the solar panels and other equipment, selling electricity to Walmart through a power-purchase agreement that locks in the price for 15 years, Canoy said. Walmart would get the renewable energy credits to sell.
“(This allows) Walmart to buy power at competitive prices and hedge against future utility rate increases with no upfront capital costs,” according to a press release.
If the IPA approves the Walmart solar projects, SunPower still has to get permits for installation and follow other city or county rules and regulations. The company plans to work with local contractors, who will hire some laborers and electricians, Rogan said.
“Typically, installations like this would take less than six months,” he said. “So most of them should be online by the end of 2019.”
Walmart began installing solar panels on stores in 2007, first in California and later in Hawaii and Arizona. Today, the company has solar systems at about 350 sites in 18 states.
“We’re always excited when we can do it in a new market,” Canoy said.
Goal is 50 percent renewable by 2025
Two years ago, Walmart set a goal of powering 50 percent of its global operations with renewable energy by 2025. The company operates more than 12,000 stores in 28 countries, including 5,000 in the United States.
Walmart expects to save money with the transition to renewables.
“It’s also the right thing to do,” Canoy said.
Walmart and SunPower estimate that the annual “carbon offset” resulting from the 21 Illinois projects will equal the amount of carbon sequestered by more than 24,000 acres of forest, using the U.S. Environmental Protection Agency greenhouse gas equivalencies calculator.
Other locations of Walmart stores and distribution centers in Illinois expected to go solar next year are Benton, Dixon, Galesburg, Jacksonville, Kewanee, Macomb, Marion, Mattoon, Morton, Murphysboro, Pekin, Peoria, Robinson, Spring Valley, Sterling, plus two in Decatur.
Canoy said the company plans to include more Illinois sites in its solar expansion, working with a different vendor, but officials aren’t ready to announce which ones.
When considering candidates, Walmart looks at a variety of criteria. Stores can’t have any immediate plans to expand or relocate. Buildings must be owned, not leased, and have relatively new roofs.
The Adjustable Block Program was authorized by the Illinois Future Energy Jobs Act of 2016. It set a goal for the state to get 25 percent of its electricity from renewable sources by 2025. The legislation was billed as a way to strengthen the state’s power grid, keep down consumer costs, stimulate job growth and protect the environment.
“Illinois has created a fantastic state to invest in solar,” Canoy said.